Car service financing fintech ASF lands £14m despite production slow down
Auto Service Finance (ASF), the UK-based financing solution for car repairs and services, has landed a £14 million investment despite an industry-wide slow down for automotive companies during coronavirus.
The fresh capital injection is made up of £850,000 in equity from private investors and a £13.3 million debt facility from London-based Naviter Capital.
The investment comes after UK car production dipped by more than a third last month to its lowest since 2009. With coronavirus lockdowns forcing factories to close and stunting demand for vehicles, just 78,767 vehicles left UK factory gates in March.
This is some 47,428 fewer than the same period in 2019, according the automotive industry’s lobby group, the Society of Motor Manufacturers and Traders (SMMT).
ASF helps car dealerships sell more to their customers with its interest-free buy now, pay later financing product which uses proprietary algorithms to make real-time lending decisions.
Investor Naviter Capital says ASF’s “high-quality” lending model paired with its “razor-sharp” customer focus were big factors in why it decided to close the investment this month.
The fintech says it’s seen “major growth” off the back of its instalment financing model, enabling dealerships to sell £50 million-worth of service work since its launch in 2015.
The payment solution is used by more than 2,000 dealership sites across the UK, including sites belonging to Jaguar Land Rover, Peugeot Citroën, Ford and Vauxhall.
ASF makes its money from these dealerships, which pay the fintech a percentage of the work sold using its financing solution.
“Dealerships are going through a particularly difficult time at the moment,” says ASF’s co-founder and CEO James Jackson.
“And while this will lead to an unavoidable short-term slowdown in aftersales activity, many have already recognised the longer-term importance of adopting interest-free payment methods within their service departments.”
During the coronavirus, ASF has tried to help vulnerable consumers by discounting their final repayment bills.
Looking ahead, ASF says it will use the investment to double its tech team and gear up for expansion into European markets “in the months ahead”.
“The technology behind our platform is at the heart of our commitment to providing ethical payment options to customers and a reliable and robust solution to dealerships,” says Jackson.
“This means more investment in the risk modelling our platform includes, as well as greater integration with other areas of technology used in the automotive service sector.”
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